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What Murdoch Has To Say About His DJ Bid

Here is a partial unofficial transcript of a fascinating interview that Rupert Murdoch gave Tuesday to his Fox News Cable Channel which goes into much of the reasoning behind his $60 a share bid for Dow Jones.

Neil Cavuto: Is this (bid) so generous so others don't bother to outbid you?

Murdoch: Well, I hope so. But we feel it's worth this. This is the greatest newspaper in America, one of the greatest in the world. It has great journalists which deserve, I think, a much wider audience. We feel that with coming both online and offline, there's a great deal to be done here. It's got great journalists, it's got great management, but it's got a rather confined capital. It's got to be part of a bigger organization to be taken further.

Cavuto: All right, now the folks at Bloomberg put out a statement earlier – the only ones, I would suppose, with the cash on hand to make a competitive bid – saying essentially there is no interest on that part. What did you make of that?

Murdoch: Well, I guess it would be difficult to buy it and run for president at the same time. But it was a relief that they came out and said that.

Cavuto: But there is still a lot of private equity guys out there that have billions on hand. They could cause some trouble. Are you worried?

Murdoch: No. We are paying, offering a very, very high premium, which I don't think they could reach. They need to leverage with a lot of interest-bearing notes, and this is already at about 50 times earnings.

Cavuto: Maybe your biggest worry, Mr. Murdoch, is your own shareholders, who are asking, 'what's he doing? What's he doing?'

Murdoch: Oh, I think they have faith in me. They've been very loyal to me for a long time. Our company is now worth, has a market cap of over $70 billion, I think. So, we have had our ups and downs. Often when I have made big moves, the shares have gone down a bit, only to go up a lot more later on.

Cavuto: The next hurdle is the regulatory hurdle, assuming no one else makes a competitive bid. You have to get past a very feisty regulatory environment and a changing Capitol Hill that isn't too enamored with you, Mr. Murdoch, so do you expect problems?

Murdoch: Oh, I am not aware of that. I have good friends on both sides of the aisle. There are no laws against this. No laws covering national newspapers, in terms of television stations and overlaps or anything of that sort. You don't have other major national newspapers, so there's no monopoly issue.

Cavuto: OK, so because you own a major broadcast network, a host of cable news channels, this one you're watching, notwithstanding, there there are no competitive issues that regulators might look askance at because the journal is a national paper?

Murdoch: We can't see any at all.

Cavuto: Let me ask you about what is going on in with newspapers right now. They were considered a dead medium, dinosaurs, and Knight-Ridder put itself up for sale, ended up getting scooped up by McClatchy for a nice premium. Then Tribune went private, an $8.2 billion deal orchestrated by Sam Zell. What's going on?

Murdoch: Well, I think young people are reading newspapers less or reading it on the Web. We have to adapt ourselves to that, not only to attract readers to the hard copy, but more and more readers to the online and to commercialize that. And the great thing, and the value of financial journalism and high-quality journalism is that you can charge for it. The Wall Street Journal and the Financial Times, I think, are the only two newspapers in the whole world that charge for their online editions.

Cavuto: All right. Now very soon, Mr. Murdoch, I'm going to be speaking to your friend Jack Welch, who was very interested in buying the Boston Globe owned by the New York Times and that went nowhere, effectively, because, I guess The New York Times didn't want him to own it. But what do you make of the environment like that? Would this be more of a doable deal, because at least, philosophically and editorially, you find a kindred spirit?

Murdoch: I think Jack was a bit tight, you know. He only offered $50 million. So, this is a big, generous offer. It is a family newspaper. We appreciate the sensitivities. We are a family company, too. This family has done a fantastic job as the guardians of this newspaper and its editorial traditions, which were laid down by the great Bernard Kilgore in the 40's, 50's and 60's, when he took the circulation from 30,000 to over a million and really invented modern journalism. And we realize that the family, although not personally involved, have been great guardians. And we respect that.

Cavuto: All right. Now you're referring to the Bancroft family. They own 24.7% of the outstanding shares, but because of super-voting shares and the rest, it works out to better than 60% of the vote. Has the family gotten back to you or indicated – I know they're spread out all over the place – but what have they told you?

Murdoch: Nothing directly, other than that they are pursuing the matter and discussing it. They've appointed bankers and lawyers, as has the company, and we have, too. We would expect to have a meeting sometime in the next two or three weeks.

Cavuto: So has that been set up or you're talking about setting it up.

Murdoch: Neither. We haven't talked about it. We haven't been in direct touch.

Cavuto: I should disclose for viewers here I'm helping get a business channel up and running for you. How will this deal affect or impact that?

Murdoch: I think it will help it, of course. There is a deal already with CNBC. But we just want to have a business channel that lives up to the quality and traditions of The Wall Street Journal, and we think that if we can do that, we will do very well.

Cavuto: As you know, Mr. Murdoch, they have personalities – reporters and editors – that appear on CNBC, deals, I think, that continue through 2012. How would this impact that?

Murdoch: Well, there are a lot of other things in the Journal, and indeed, their editors appear on Fox every Saturday, or I think, Sunday, so we think there's plenty of room for us to work together.

Cavuto: Let me ask you finally about how you've bucked the circulation trend. I notice, when we look at all of the major newspapers across the country, the New York Post, if my numbers are right, was north of 7% gain year over year. Do you hope to do the same if you get the Journal, if it includes Barron's and some of the others to bring stymied circulation up, just for the paper product, itself?

Murdoch: Well, the Journal, in fact, in this period is up a little bit. We would hope with more resources, expanded coverage of many things. we would see the circulation increasing. But more important is the increasing online, on the Web, where people are paying for it, where we would hope we would find millions of people around the world.

Cavuto: OK. We are hearing that members of the family are not too keen on this bid. Have you gotten any indication right now – again, the crucial thing here is that it is a big family, it is spread out. One of its members was looking at a deal some years back with The Washington Post. Were you hearing anything contrary to this?

Murdoch: No, I think what we were hearing last week first that the winds were blowing against us, then we heard they decided to pursue it. I think, frankly, I don't even know whether the whole family has been consulted yet. But there is plenty of time, and we just take it calmly and hope that they will take it calmly and think about it. It's a generous offer. We are the sort of people with the same traditions that, I think, would prove great guardians for this paper.

Cavuto: Finally, sir, I'm sorry for the delay. We're getting some news flashes coming in to us. The union, at least, is opposed to this at face value. Does this surprise you?

Murdoch: No, I think that naturally people are a little bit frightened of change. I am not expecting that we will have any serious clashes. If I had done this at the New York Times, which was quite an idea, I think we would have had a march.

Cavuto: Did you entertain that?

Murdoch: Not seriously.

Keywords:Rupert Murdoch,Fox News

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